It was apparent to everyone in the room that the financial services industry is on the verge of its greatest change in decades. Mobile wallets have begun to change how consumers conceive of money. Venmo has shifted the peer-to-peer cash economy. Blockchain-supported cryptocurrencies, though massively volatile, may very well redefine how value changes hands entirely.

Since nearly every financial institution and payments processor realizes change is on the horizon, everyone is scrambling to develop owned platforms on emerging technologies. Most major banks of mobile wallets. Retailers like Walmart are rolling out their own payment platforms. Apple Pay, Samsung Pay, Android Pay, and Amazon Pay all have chunks of market share, but insignificant use.

Driven largely by executives demanding progress from their innovation teams, this proliferation has led to rapid, incredible innovation and progress in fintech services. Yet customers barely use any services in this fractured marketplace, mostly because no company has built a compelling use case for most of the services they build. And that’s a problem that needs fixing if the industry wants to evolve.

Customers Don’t Care About Platforms

While 23% of consumers say they might give up their banking app for a Swiss Army knife mobile wallet, most consumers have no problem simply swiping or inserting their card to make a purchase. No consumer really cares (or understands) about the decentralized nature of blockchain, except that their cousin probably lost a few thousand dollars speculating on bitcoin in the last few months.

The average consumer has little concept of the emerging technologies shaping executives’ business initiatives. They just want to know why the chip reader at the point-of-sale takes longer than swiping. They want to make sure their mobile banking app is secure. Consumers don’t care about platforms or solutions that are simply more efficient for their bank; they need businesses to solve their problems, something legacy financial companies are not built to do.

Adopting a Startup Mentality

The enterprise innovators in the room spoke a lot about Venmo doing what many would have considered impossible a few years ago: making peer-to-peer transactions fun, just by throwing a few emoji into an app. Of course, Venmo’s innovations go much further than emoji. It streamlined the entire repayment system in a bare-bones, simple user interface. The only barrier to adoption is user concern for security.

Startups like Venmo excel at defining marketplace painpoints and developing new approaches to horrible customer experiences. Working with the highly regulated world of financial services, the enterprise innovation leaders freely admitted that startups and agencies have more freedom to attack customer problems head on.

Enter Design Thinking

Too often, large organizations start with the solution in mind and work backward to a consumer problem. Inevitably, they find a square hole to fit the square peg they’ve built and launch it to find out that no one wants it. Kevin Lewis of First Data shared at a recent Enterprise Entrepreneurship Series that in the early days of his innovation lab, an executive tasked them with building a mobile wallet – since every financial company needed one. Kevin’s team built it and launched it, only to learn later from vendors and merchants that no one wanted it.

The traditional business model of designing products for business needs and considering customer desires simply no longer works financial world. As our innovators shared, products built for the business or executive whim simply cannot compete for market share, while a product like Venmo was able to cut past an established leader like PayPal by delivering a simple customer experience.

Increasingly, financial innovation labs are using design thinking frameworks to bypass those internal pressures to go directly to consumers. But selling that new focus up the chain requires understanding how customer-focused product development should happen.

Pillars of Design Thinking:

Innovation isn’t owned by technologists. While an innovation lab may control new initiatives, a team with diverse backgrounds and skillsets will drive development. Innovative practices should reside across the entire organization.

Customer discovery begins with understanding user behaviors by interacting directly with the end-user, rather than relying on existing customer research to predict their needs.

Many enterprise leaders often falsely equate design thinking with agile development. While the two methodologies often go hand-in-hand, and share the same focus on speedy launches and iteration, financial institutions can benefit from design thinking without fully leveraging agile development practice across the enterprise. While building in agile can result in fewer downstream production issues, design thinking represents more of a shift in mentality from business needs to customer discovery. By discovering customer problems in the early stages of development, rather than in the months after product launch, innovators can ensure the core business is aiming at the correct target.

Given our history with financial companies like American Express, Wells Fargo, and Fifth Third Bank, we’re excited to see this industry begin to work beyond the traditional, stodgy legacy of finance and begin to engage with customers directly. While fintech is booming in Atlanta, it’s clear the company that offers the best customer experience will survive the industry’s inevitable consolidation and attrition.

Want to know more about design thinking practices? 352 is launching Design Thinking for the Enterprise, an online training series tailored to empower innovators and intrapreneuers who want to instill design thinking across their organizations.

352 is an innovation and growth firm. Leading companies hire us to find billion-dollar opportunities, build killer new products and create hockey-stick growth. We bring grit and new-fashioned thinking to innovation, digital development and growth marketing.